Hau Giang Reduces 50% Investment Licensing Time

    Hau Giang province affirmed to speed up administrative procedures reformation, reducing 50% of the time for granting investment licenses and business registration, creating favorable conditions for investors when they set up business.

In which, Hau Giang province is calling for investment in 7 key projects, including industrial zone infrastructure development, hi-tech agriculture and ecotourism… with a total investment of nearly 300 million USD.

According to the vice chairman of Hau Giang People’s Committee, besides the policies in accordance with general regulations, localities also have their own incentive mechanisms for investors such as tax incentives, land rent exemption and reduction, investment support for manufacturing, preservation and processing facilities…, especially projects for sustainable development of agriculture and high technology application…

Furthermore, Department of Planning and Investment of Hau Giang province affirmed that the local authorities will shorten the maximum time for carrying out procedures, creating favorable conditions for enterprises and investors. Specifically, the business registration procedure is 3 days according to the law, but the locality can complete in 1.5 days. Regarding the investment policy, the law regulates 32 days but it is shortened to 15 days by the locality; time to receive and appraise for issuing investment certificate is only 3 days; discounted 2 days as prescribed.

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Regulation on Grid Connected Solar Power Investment Project

    The Ministry of Industry and Trade has recently issued Circular 16/2017/TT-BCT on project development and the model purchase contract for solar power projects.

Accordingly, the grid connected solar power investment projects are regulated as follows:

– The investor can only set up a solar power investment project included in the provincial and national level solar-power development plan; or provincial and national power development plan that are approved.

– The contents of the solar power investment project must comply with the regulations on management of investment in construction and the following requirements:

+ Evaluate the impact of solar power project connection plan on the power system in the area.

+ Having equipment connected to the SCADA system or moderation information so that the forecast information on electricity output can be transmitted per hour to the regulated agency.

– The equity ratio of grid connected solar power projects should not less than 20% of the total investment.

– The area of long-term land use shall not exceed 1.2 ha/01 MWp.

Circular 16/2017/TT-BCT takes effect on October 26th 2017.

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Non-Compete Agreement In Labour Contract

    The principle “freedom to work” is recognized and respected by the Labor Code 2012. However, this regulation may harm legitimate business interests of employers when employees, during the performance of the labour contract or especially after the termination of the labour contract, reveal the business or technology secrets to compete with the employers. Therefore it is necessary to create the limits on the freedom to work, for the purpose of preventing workers from revealing employers’ business or technology secrets. Law in many countries around the world has recognized “Non-Compete Agreement” as a tool to enforce security programs.

The Labour Code 2012 and sub-law documents do not mention to the definition of “Non Compete Agreement”, but make the provision that: “When an employee performs a job which is directly related to business or technology secrets as prescribed by law, the employer may reach a written agreement with the employees on the content and duration of protection of business or technology secrets, and benefits and compensation in case of violation by the employees”.

The definition of “Non-Compete Agreement” is inferred by explaining the provisions of law and referred to the articles of legal experts. “Non-Compete Agreement” is a legal contract between an employee and an employer, for a purpose of preventing the worker from competing directly or working for a competitor during the performance of the labour contract or especially after the termination of the labour contract. Thereby, we can infer that only when employers have business or technology secrets, they have the right to make Non-Compete Agreement. Moreover, the legitimate business interests that are protected must be legal, unique, influence the maintenance, stability and development of business activities.

Analyzing the provision “Non-Compete Agreement”, we can conclude that, the employees adjusted by the “Non-Compete Agreement” is the worker who is directly involved in business or technology secrets (such as the senior managers, senior technicians and others are obliged to keep business or technology secrets). The Labour Code 2012 has regulated that the “Non-Compete Agreement” must be on text.

The provision of Non-Compete Agreement is necessary for employers to protect business or technology secrets, but it is difficult for workers to find job after the contract terminates. Therefore, Non-Compete Agreement should balance the interests between employers and employees by setting reasonable limits in time, geographic scope and particular industry or activity.

(i) For restriction on time, the Labour Code 2012 does not specify restriction period or the point of starting restriction period. This is entirely upon the parties. However, Non-Compete Agreement can not be enforced unless it specifies a reasonable restriction period. Referring to the law of some European countries (Germany, France) and Asian countries for example in China, the maximum restriction time is 02 years, to ensure that employees have conditions to find new jobs.

Moreover, it provides opportunities for employers to motivate, improve the technology and business secrets to develop. On the other hand, law in some other countries distinguishes between highly skilled workers (group 1) and unqualified employees (group 2). Spanish law is a typical example, the maximum restriction period is two years for workers in group 1 and six months for group 2.

(ii) Restriction on geographic scope is not regulated in Vietnamese law. Meanwhile, most countries such as France, China and Russia all regulate that the restriction is on the whole country. However, due to differences in society, economic and education conditions, Vietnam can hardly regulate like that. On the other hand, when making the provisions of the restrictions on geographic scope, it is necessary to base on the performance of the company, the method of production, the size of and the type of company.

(iii) For restriction on particular industry or activity, most courts tend to consider the work that employees will work in the new labour contract. Normally, if the new job is similar to the old one, it will not be approved by the court. Under the Labour Code 2012, the content of restrictions on particular industry or activity when employees enter into agreement include: (i) obligation to keep trade information confidential (business secrets, technology secrets) ; (ii) not be able to work for the competitor of former employers or to conduct his own business competing with former employers.

Labour Code in our country does not specify the scope of the restriction on particular industry or activity, it depends entirely on the will of the parties. Non-Compete Agreement can not be applied to all jobs, but only to those who hold business and technology secrets. For every type of work there will be a different range of restrictions. The scope of the restriction is not exceeding the employees’ professional capacity and ensuring the opportunity of works in the future.

The benefit that employees receive when signed the Non-compete Agreement can be the opportunity for promotion, high salary, and commendation if the Non-Compete Agreement is made while the labour contract is valid. If the Non-Compete Agreement is applied after the labour contract terminates, employees shall receive the compensation. The amount of compensation is upon the agreement of the parties and must be satisfactory with the restriction of job opportunities. There are some cases that employees may not be entitled compensation are to violate the Non-Compete Agreement or die or prison sentence.

According to the Labour Code 2012, in case of violating the non-compete contract, employees have obligation to compensate, but it does not give specific compensation amount as well as the method of compensation. In order to claim compensation, employers must demonstrate these following factors: (1) the violation of the Non-Compete Agreement; (2) actual damage (the lost revenue and profit of the employer); (3) the causal relationship between the infringement and the damage; (4) fault of the employee. The amount of compensation must correspond to the amount of lost revenue or profit. In addition, employees must return the non-owned assets that are exploited and developed to compete with former employers. Moreover, employees must repay the compensation and other benefits paid by former employers if agreed in the agreement.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have law firm in Hanoi, law firm in Ho Chi Minh City and law firm in Da Nang.

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Conditions of foreign adoption in Vietnam

    Nowadays, foreigners from other countries wish to child adoption in Vietnam and bring them up to his/her country for custody. Vietnam in the meantime encourages the adoption for the better conditions on life environment, education system which would bring to the children when living with the new family. However, the adoption conditions are still regulated strictly and its acceptance procedures are considered and controlled stringently by competent authorities of the Government.

ANT Lawyers will provide to you the regulated conditions of the adoptive parents need to be met as below:

GENERAL CONDITIONS OF THE ADOPTIVE PARENT

The adoptive parent has to meet fully conditions as below for adoption:

• Having full civil act capacity;

• Being 20 years or more older than the adopted person;

• Having health, financial and accommodation conditions for assuring the care for and nurture and education of the adopted child.

• Having good ethical qualities.

And not being one these following cases:

• Having some of the parental rights over a minor child restricted:

• Currently serving an administrative handling decision at an educational institution or medical treatment establishment;

• Currently serving an imprisonment penalty:

• Having a criminal record of commission of any of the crimes: intentionally infringing upon another’s life, health, dignity and honor; maltreating or persecuting one’s grandparents, parents, spouse, children, grandchildren or caretaker; enticing or compelling a minor to violate the law or harboring a minor violator; trafficking in. fraudulently swapping or appropriating children, which has not been remitted yet.

CONDITIONS OF THE FOREIGNER ADOPTIVE PARENTS

After meeting fully conditions above, Vietnamese living abroad, foreigners permanently living abroad will be entitled to adopt identified Vietnamese children if they fall into the following cases:

• Being the step father or step mother of the to-be-adopted child;

• Being natural aunt or uncle of the to-be-adopted child;

• Having adopted a child who is a sibling of the to-be-adopted child;

• Adopting a child who is disabled or infected with HIV/AIDS or another dangerous disease, including: children with cleft lip and cleft palate, children who are blinded with one or two eyes; mutism, deaf; dumb; children with curved arms or legs, children with missing fingers, hands, foot (feet), toes, children infected with HIV; children with heart diseases; children with navel, groin, belly hernia; children without an anus or sexual organ; children with blood disease; children with diseases requiring life-long treatment; children with other disabilities or dangerous disease which restricting the chances of adoption;

• Being foreigners currently working or studying in Vietnam for at least 1 year.

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Construction Contract in Vietnam

    In Vietnam, like other countries companies seeking to build an office building or industrial facility work with the contractor through a construction contract.

There are several types of construction contract used in the construction industry depending on the level of control from parties involved in terms of investment, responsibilities and duration.

Fixed price is a type of construction contract that offer a total fixed priced for all construction related activities. This contract type could include incentives or benefits for early termination, or can also have penalties, called liquidated damages, for a late termination. This contract type is preferred when a clear scope and a defined schedule has been reviewed and agreed upon.

Cost plus contract is a type of construction contract involves payment of the actual costs, purchases or other expenses generated directly from the construction activity. This type of contract must contain specific information about certain pre-negotiated amount (some percentage of the material and labor cost) covering contractor’s overhead and profit. Costs must be detailed and should be classified as direct or indirect costs.

Time and material contract is usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process. The costs must be classified as: direct, indirect, mark-up, and overhead. Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met, in order to have the owner’s risk minimized.

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Procedures to Apply for Temporary Residence Card in Vietnam

    For foreigners wishing to reside in Vietnam, they must belong to the subjects to be granted temporary residence card. For most of the case, the temporary residence card holder are investors whom invest to establish company in Vietnam, or employee being employed and sponsored by an organization in Vietnam.

The following shall details the procedures to be implemented for applying for temporary residence card in Vietnam.

I. Subjects to be Granted Temporary Residence Card

• Issued to members of diplomatic missions, consular offices, representative offices of international organizations affiliated to the UN, representative offices of intergovernmental organizations and their spouses, children under 18 years of age, and housemaids during their term of office. (NG3)
• Issued to people who come to work with units affiliated to Vietnam’s Communist Party; the National Assembly, the government, Central Committee of Vietnamese Fatherland Front, the People’s Supreme Court, the People’s Supreme Procuracy, State Audit Agency, Ministries, ministerial agencies, Governmental agencies, the People’s Councils, the People’s Committees of provinces. (LV1)
• Issued to people who come to work with socio-political organizations, social organizations, Vietnam Chamber of Commerce and Industry. (LV2)
• Issued to foreign investors in Vietnam and foreign lawyers practicing in Vietnam. (DT)
• Issued to Managers of representative offices or projects of international organizations and foreign non-governmental organizations in Vietnam. (NN1)
• Issued to heads of representative offices, branches of foreign traders, representative offices of other foreign economic, cultural, professional organizations in Vietnam. (NN2)
• Issued to people who come to study or serve internship. (DH)
• Issued to journalists who have permanent residences in Vietnam. (PV1)
• Issued to people who come to work. (LD)
• Issued to foreigners that are parents, spouse, and children under 18 years of age of the foreigners issued with LV1, LV2, DT, NN1, NN2, UNIVERSITY, PV1, LD visas, or foreigners that are parents, spouse, and children of Vietnamese citizens. (TT)

II. Conditions for Implementation 

• Time to stay in Vietnam more than 01 year;
• Valid passport more than 01 year;
• In case of having a work permit, the work permit of the foreigner must be valid for 01 year from the date of the application for a temporary residence card. For investors, there must be written documents proving that foreigners contribute capital to, or invest in, enterprises in Vietnam (business registration certificates, investment licenses …).

III. Required Documents to Apply Temporary Residence Card 

• A written request of agencies, organizations and individuals offering, guarantee and propose for temporary residence card (form NA7)
• 01 declaration of information of foreigners who apply for temporary residence, with photos and sealed by the agency or organization: A written request for temporary residence card (Form NA8); a declaration about Foreigners applying for temporary resident card (Form N7B)
• Two 3 x4 cm size photographs;
• Passport, valid visa, immigration cards (bring original for comparison);
• Notice of use of the seal of the enterprise
• 01 copies or photo (bring the original for comparison) proof of purpose to stay in Vietnam.

Depending on situations, the following documents would be required: investment licenses, permits the establishment of enterprises, work permit in Vietnam, certificate of board members and permits the establishment of representative offices, marriage/birth registration.

IV. Implementing Agencies to Apply Temporary Residence Card:

Immigration management Department, Police provinces and cities directly under the Central Government.

V. Duration to Obtain Temporary Residence Card in Vietnam: 05 to 07 days;

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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Vietnam Can Issue Permanent Residence Card to Foreign Investors in Phu Quoc

    The Ministry of Planning and Investment proposed a series of preferential mechanisms for Phu Quoc special economic zone.

The Ministry of Planning and Investment has just submitted to the Government a draft Law on Special Administrative Units. In this draft, the Ministry proposes a series of mechanisms to attract investment capital and foreign experts to live and work in Phu Quoc special economic zone.

Specifically, according to the draft law, Phu Quoc is prioritized investment to become a center for trade, high-end services and international procurement. This will be the only special zone to be prioritized for the development of fisheries, aquaculture and processing and fishery logistics.

According to the Ministry of Planning and Investment, the potential advantages of Phu Quoc can completely develop into a commercial center, eventhough Phu Quoc is located far from the land and there are only two main lines of transportation that are airway and sea. Phu Quoc also has favorable conditions for hydro-meteorology, natural environment, mountains, forests, marine and ecosystems; moderate weather, favorable for year-round tourism development. Especially, Phu Quoc has a large fishing ground and potential for aquaculture.

In addition, Phu Quoc has fertile farmland, large forest land, occupies 63.2% of the total natural land area, facilitates the development of agricultural economy and sustainable eco-tourism development.

Like other two special economic zones, which are Van Don (Quang Ninh), Van Phong (Khanh Hoa), the Ministry of Planning and Investment proposed a series of incentives for Phu Quoc such as income tax exemption for 5 years, but not exceed 2030 for individuals who have taxable income arising in the special economic zone. In subsequent years, the personal income tax payable will be reduced by 50%.

For managers, scientists and highly qualified experts with income subject to personal income tax in the 3 special economic zones mentioned above, they are also entitled to tax exemption until the end of 2030 and 50% reduction of tax amount in the remaining years.

In addition to the application of general incentives for special economic zones, Phu Quoc has also been proposed to enjoy a separate mechanism, such as raising the level of allowances from 30% to 50% of the basic salary for officials and employees working here.

In particular, in order to encourage investment, the Government of special economic zone will issue permanent residence cards to individual foreign investors with investment projects of 5 million USD or above, with the residence time of 5 years or more in Phu Quoc and not breaking the law.

Regarding infrastructure, according to the Ministry of Planning and Investment, infrastructure of Phu Quoc has been invested quite synchronously to meet the needs of large-scale tourism development. Many high-class and large-scale resorts have come into operation. The Politburo has agreed to open casino project in Phu Quoc for the Vietnamese.

For Van Don special economic zone, according to the Ministry of Planning and Investment, priority will be given to develop island eco-tourism, innovative industries and high-tech agriculture.

Van Phong, in particular with its location, will be promoted to develop deep-water ports, logistics services, medical services, high-quality resort…

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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How to Prepare and File a Lawsuit in Vietnam?

    If two parties have a dispute over a commercial matter in Vietnam, they should try to resolve disputes through negotiation, or mediation before considering to file a lawsuit against the other at a court in Vietnam.

To implement their right to sue, the plaintiff must prepare and submit the claim at the competent court in Vietnam. The dispute lawyers in Vietnam with experience and understanding the litigation process should be invited at the early stage to advise, represent and prepare to defend the client. The claim filing should include the petition and the supporting documents. The petition is the most important legal document for the court to review and resolve the claim of the plaintiff, as such it should be carefully prepared to meet the requirements of the form, authority, and further contain information about the plaintiff, defendant, summary of the case and the request of the plaintiff.

The contents of the petition must be presented in full, brief, clear, and in logic. The plaintiff should provide all documents, and evidence to prove the merit of the claim including contract, purchase order, separate terms and conditions, appendixes (if any), minutes of meetings of negotiations, invoices, delivery proof, legal status of plaintiff and defendant, documents to determine the legal status of the representative of the plaintiff such as appointment decision, power of attorney. In order for the document issued in foreign country to be valid in Vietnam, the documents presented have to be original or notarized, legalized and authenticated copy and translated into Vietnamese in accordance with Vietnam laws.

When the claim has been filed at the competent court in Vietnam provided all conditions of acceptance are met, the court will notify the plaintiff or its representative know the court fees. When the applicant advance the court fee, the case will be recorded and brought into the process for settlement.

At the trial preparation process, the case will be assigned to a judge whom after studying would request parties to present additional necessary papers and documents relating to the case. Parties or their representative would then be requested to meet the judge to provide further information or testimony or attend reconciliation. If the disputing parties resolve disputes with each other, the court will make a record to acknowledge the successful reconciliation and issue the decision to recognize the agreement of the parties. Where reconciliation fails, the court records that and shall issue the decision to bring the case to trial.

Disagreements or disputes arise when parties can not agree on issues related to contract provisions, expected outcome or performance starndards…There are cases when the dispute is over a debt obligations matters which a debt recovery law firm could assist at an early stage to manage the collection process pre litigations including negotitions and managing expectations of both sides.

ANT Lawyers, a law firms in Vietnam will be available to assist the clients when required to handle dispute matters out of court, at court or through arbitration in Vietnam.

How to Prepare and File a Lawsuit in Vietnam?

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Propose to Remove Nearly 2,000 Business Conditions

    The Ministry of Planning and Investment has proposed to remove nearly 2,000 business conditions from ministries and sectors that are thought to cause difficulties and obstacles for businesses.

According to the report of the Ministry of Planning and Investment submitted to the Government, this agency proposed to remove 1,930 requirements and conditions on business that are considered as sublicenses hinder business for a long time. Of these, the Ministry proposed removing all or part of 302 financial conditions. In addition, 85 business conditions on location and 1,336 conditions on production capacity, 127 conditions on business methods, 80 conditions on planning… are proposed to be abandoned entirely.

In addition, other business conditions related to human resources issues (except for some professions that require professional qualifications and experiences such as doctor and auditor) and some conditions with inappropriate contents, the Ministry also recommends the abolition of all or part.

According to the report of the Central Institute for Economic Management (CIEM), there are about 4,284 business conditions, corresponding with 243 conditional investment businesses. Of these, the Ministry of Industry and Trade has the highest number of business conditions with 1,152 conditions; next is the Ministry of Agriculture and Rural Development, Ministry of Health…

Most of these business conditions are creating unreasonable barriers to investment, entry into the market, limiting the number of newly registered businesses, increasing production costs, discouraging businesses.

Moreover, business conditions also reduce market competition, productivity and competitiveness of the economy. Businesses also face with many risks in the process of operation when many business conditions are unclear, creating opportunities for the arbitrariness of state management agencies and the harassment of officials… These effects are going backwards and hinder the Government’s resolve to improve the business environment and cut costs for businesses.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Da Nang.

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Issuance of Work Permit for Foreigner Online

    From October 2nd 2017, the issuance of work permits to foreign employees working in Vietnam via Internet will be applied in accordance with the guidance of Circular No. 23/2017/TT-BLDTBXH issued by the Ministry of Labor – Invalids and Social Affairs on August 15th 2017.

Accordingly, the issuance and re-issuance of work permits for foreigners will be made via the electronic portal: http://dvc.vieclamvietnam.gov.vn. Employers must register their account to log into the Portal.

Before at least 7 working days, from the date the foreign worker intends to commence work, the employer must declare the information in the declaration form and submit the application for work permit via the electronic portal. The dossier includes: The declaration form and enclosed papers in accordance with the provisions of law on e-transactions and management of foreign laborers working in Vietnam; if the attached documents are in the form of paper, the employer must convert to electronic versions like pdf, doc, docx or jpg.

Within 5 working days from the date of receiving the dossier, the licensing agency shall reply via email to the employer. If the dossier is invalid, the licensing agency must clearly state the reasons.

Upon receipt of the result of notification of valid dossiers, the employers shall submit directly or by post the originals of the work permit application dossiers to the licensing agency for inspection, comparison and archive regulations. Within a maximum of 08 working hours from the date of receipt of the original application, the licensing agency shall return the result to the employer.

This Circular comes into effect from October 2nd 2017.

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Conditions for Business in Accounting Services of an Enterprise

    Legal Based:

• Law on Accounting 2015;

• Circular 297/2016/TT-BTC on granting, management and usage of certificates of eligible for providing accounting services.

1. Form of business

a. An accounting firm may be established in the form as follows:

• A multi-member limited liability company;

• A partnership;

• A private enterprise.

The accounting firm must not contribute capital to establishment of another accounting firm, except for contribution of capital together with a foreign accounting firm to establishment of an accounting firm in Vietnam.

b. A foreign accounting firm is allowed to provide accounting services in Vietnam as follow manners:

• Contributing capital together with an existing accounting firm in Vietnam to establish an accounting firm;

• Establishing branches of the foreign accounting firm;

• Provide accounting services across the border as prescribed by the Goverment.

2. Conditions for granting Certificate of eligibility to provide accounting services

a. For a multi-member limited liability company

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;

• Having at least two capital contributors (members) are accounting practitioners;

• The legal representative, director or general director of the company is an accounting practitioner;

• Ensuring the proportion of capital contribution by accounting practitioners over 50%; Ensuring the maximum proportion of captital contribution of organization members equal to 35% of charter of an accounting firm.

b. For a partnership

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;

• Having at least two general partners are accounting practitioners;

• The legal representative, Director or General Director of the partnership is an accounting practitioner.

c. For a private enterprise

• Having an Enterprise Registration Certificate, Investment Registration Certificate or an equivalent document as prescribed by law;

• Having at least two accounting practitioners in the enterprise;

• The owner of the private company, who holds the position of Director, is an accounting practitioner.

d. A branch in Vietnam of a foreign accounting firm

• The foreign accounting firm is permitted to provide accounting services according to regulations of law of its home country;

• Having at least two accounting practitioners, including the Director or General Director of the branch;

• The Director or General Director of the branch does not concurrently hold the position of manager or executive officer of another enterprise in Vietnam;

• The foreign accounting firm has submitted a document to the Ministry of Finance that it is responsible for every obligations and commitments of the branch in Vietnam.

3. Granting Certificate of eligibility for business in accounting services

a. Preparation of Dossier

• An application form for the Certificate of eligibility to provide accounting services;

• Copies of the Certificate of Enterprise Registration, Investment Registration Certificate, or an equivalent document;

• Copies of Certificates of Accounting Practice Registration of accounting practitioners;

• Employment contracts between the accounting firm and accounting practitioners;

• Documents proving capital contribution (for limited liability companies);

• The company’s charter (for partnerships and limited liability companies);

• A written commitment to take responsibility by the foreign firm; documents proving the foreign firm is permitted to provide accounting services (for branches in Vietnam of foreign accounting firms).

b. Order and procedure

• Enterprises submit dossier to Ministry of Finance;

• Within 15 days form the day of receiving valid dossier. Ministry of Finance shall issue the Certificate of eligibility to provide accounting services to enterprises;

• In case need to clarify the matters related to the dossier. Ministry of Finance shall request enterprises to explain and then granting Certificate to enterprise within 15 days form the day of receiving the valid additional document.

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What a Law Firm Could Assist in an M&A Deal?

    M&A, abbreviated by Mergers and Acquisitions is expanding in both quantity and volume in Vietnam in many sectors. Successful M&A deals depend on various factors and legal due diligence, and drafting agreements are important processes in Vietnam.

For investors whom are interested in M&A deal in Vietnam as buyer or seller,it is important to hire a law firm that will assist in the process. The law firms in Vietnam could provide assessment of the target company through a legal due diligence, a legal background directly related to M&A deal, all of which are necessary to the completion of a successful deal. The attorney could then draft the letter of intent, and legal contracts, including the final purchase agreement, which will include a lot of stipulations that will need to be done correctly in order for the business transaction to be beneficial to both parties and in compliance with Vietnam regulations.

A law firm with expertise of Vietnam regulations, with the lawyers having experience and legal knowledge will be able to provide the clients with the right check-list of the documents to review. In addition, the presence of lawyers contributes to strengthening the trust of the parties. In recent years, foreign businesses have often made acquisitions of all or part of a Vietnamese enterprise, and they often require the seller to engage law firms specializing in M&A. And now, not only the foreign businesses but also the Vietnamese parties are in need of conducting M&A deals with the participation of lawyers to ensure the success.

Lawyers shall conduct legal due diligence of enterprises, check reports and explanations with prudence, honesty and efficiency. They help the buyer and/or seller to understand their legal status, legal rights and obligations, legal regulations for assets, labor contracts, land records, construction and investment registration, certificates, and licenses and other matters. This is the basis for determining the status of enterprise and possible legal risks may cause. Lawyers will conduct and produce the most comprehensive, accurate, legal and objective information and legal documents by their professional, knowledgeable and ethical.

Lawyers shall advise the structure of an M&A to ensure the commercial intent that the parties are aiming and shorten the execution time and costs. In addition, it ensures the legality of procedures, safety and minimizes the legal and financial risks for the parties.

There is no common contract template for all M&A deals. Lawyers shall actualize the trade agreements, the will of the parties to the legally binding terms of the contract as well as clearly defines the rights and obligations of the parties to ensure the enforceability, minimize unlawful agreements or unclear terms that may cause the subsequent disputes.

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How To Conduct Legal Due Diligence for M&A in Vietnam?

    Mergers and Acquisitions (M&A) has become popular in Vietnam as the country develops and more investors are eager to invest and gain control of the business enough to engage in, decide important business matters through partial or full ownership of an enterprise. A successful M&A mean the parties achieve their financial and commercial goals (increasing capital, raising management capacity, branding, etc) and ensuring safety and restraint the risk at the lowest level, though legal due diligence undertaken by law firm in Vietnam.

The Importance of Legal Due Diligence of Enterprise in M&A activities

Legal due diligence of enterprises focuses on full and detailed assessment of legal issues relating to the legal entity, capital contribution status, shareholder status, legal rights and obligations. From the investigation information, the parties can anticipate legal risks, assess opportunities to come up with alternatives. In addition, legal assessments help parties evaluate the reliability of their counterparts as well as understand their advantages and constraints for the negotiation process.

What Legal Due Diligence in M&A Activities Entail?

Evaluate the factors related to the legal status and capacity of the target enterprise: Review the legitimacy of the establishment, operation, possession of enterprise; ensure that the enterprise is not subject to procedures for dissolution or bankruptcy and compliance with the law of the enterprise in the course of operation. The information to be checked includes: dossiers, certificate of enterprise establishment, operation licenses, practice certificates, professional liability insurance, company charter, agreement between the company owner on rights of shareholders, capital contributors, minutes of meetings, member/shareholder register, certificate of capital contribution.

Evaluate the factors related to the business and financial activities of the target enterprise: Review the system of customers and partners of the enterprise; the documents on economic contracts (with customers, suppliers, etc); dossier of investment, construction, land, project; information on guarantee, mortgage (if any), debt and credit agreement, M&A, financial leasing contract, exclusive contract, franchise, etc, in terms of value, legality, validity, progress to evaluate legal risks in the future. Review the financial statements on the accuracy of the financial status of the business.

Verify the factors related to labor: Review labor contracts, labor agreements, internal labor regulations to determine the enterprise’s financial obligations to employees, compliance Labor law and reception of labor after the purchase or sale.

Verify the factors related to intellectual property: Review intellectual property rights of enterprises including: trademarks, trade names, industrial designs, layout designs, business secrets, etc; the property has granted the patent/license. Review matters of infringement of intellectual property rights of other organizations, individuals or legal persons in order to anticipate the risks of being sued or claiming damages.

In addition, in an M&A deal, the acquirer should ensure that participation in capital contribution or acquisition of the target enterprise is permitted, the form of M&A implementation is in accordance with the law and the M&A deal was approved by the competent authority of each party. After that, the factors related to M&A transaction procedures and constraints and restrictions of law (if any) must be evaluated.

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Sales and Purchase of Ocean Ships in Vietnam

    Ship sales and purchase should involve shipping lawyers in Vietnam whom understand the laws and the shipping industry.

For long, maritime activities and carriage of goods by sea are important parts of the international economic life, supporting the import and export of goods, connecting Vietnam to the world commodities market and therefore playing as driving factors behind the development of maritime transportation field.

As the demands for transportation exists, although some times up and down depending on the cycle of the economy, ships purchase and sales are important part of maritime related transaction businesses. With its own special characteristics, the purchase or sale of ships usually involve enormous economic interests, and risks at the same time. Ships are special objects in transactions therefore require the help of local and international ship lawyers with knowledge and experience to handle.

Stages in a Ship Transaction

The sale and purchase of a ship include contract, inspections, and the closing.

At the first step, both buyer and seller appoint ship brokers to carry out the negotiating and defining the clauses needed in the contract. Once details of the contract are agreed, the parties shall initiate the process of drafting the contract under Memorandum of Agreement (MOA) which normally is under a standard form. The governing law applies to such contract is usually the law of the country where the ship is registered its nationality. To enable the international transaction of ship, parties will sign an addendum to the MOA, stating necessary documents to be provided which may include: Approval from Director or Shareholders of resolving the sale of the vessel; Export or Import Permission of the Maritime Administration (requirement depending on national legislation), Power of Attorney, as well as other related documents involving the grade, commitments of the seller, etc. Once lawyers of buyers and sellers agree on the documents and have initial checking of such, the buyer may pay a deposit as a percentage of the value of the contract.

After the forming of contract, shipping lawyers of buyer start to inspect the documents provided by the seller. The inspection of the ship could be conducted in parallel. For the documents inspection, the buyer will check the ship’s class records and certificate records. The inspection of records will reveal the history of the ship’s maintenance in compliance with the requirement of class. Furthermore, the buyer need to check the mortgages and the maritime lien records to make sure that the vessel is free from encumbrances, debts, taxes, mortgages and maritime liens. This will help prevent any damages or loss subject to the legal issue of the ship which may occur before the delivery of the ship. The buyer should also acknowledge of whether the ship owner is in debts for fuels or salaries, etc. However, in some case, it may be difficult to verify such information without the collaboration of the ship owner.

For the physical inspection, instead of just checking the logbook for the status of the ship, it is preferable to hire a professional examiner to control the process of physical inspection relating the safety, certificates, equipment and engine issues. Sending a person on the ship to participate in some of the ship’s voyages may be advisable in circumstances.

At closing, the parties shall transfer the ship and all related documents as required. During the stage of delivery, the buyer physically accepts the delivery of the vessel after re-checking the status of the vessel, the remaining amount of fuel and engines status at the designed port. The place for delivery may be at a different location from where the contract was made. It depends on the agreement between the parties and usually for the convenience of the voyage.

An important document that needs to be transfer at this stage is the Bill of Sale. The Bill of Sale should be in proper form and duly notarized. In some country, it is crucial to get the Bill of Sale registered at the authority agencies in order for it to take effect.

Other procedures that the parties also need to complete at the state’s authority agencies include legalization of the ship transaction process, transference of vessel ownership and modification of the shipping registration. The state where parties are to complete such procedure shall be the country where the vessel is registered (the country which the vessel is permitted for flying flag).

Why Shipping Lawyers are Important in Ship Transaction?

Seagoing vessel is a special type of asset in a commercial transaction. When engaging in a contract to purchase a vessel, it is important to consider not only the nationality of the owner but also the nationality of the vessel itself. As the process of the transaction involves many procedures and requirements which usually need to be complete at the state’s authority agencies, the law of the country where the vessel is registered shall have a strong influence on the interpretation and execution of the contract.

The model contract usually comes with specific requirements on the content and form of the commercial invoice and the Bill of Sale pursuant to the national legislation (the nation where the vessel is registered). The parties may agree to change some of the clause in the model contract to meet their demand in the transaction. However, if a model contract is chosen to be used, the parties should at all time acknowledge of all the clauses existing in the contract and try to comply with the form and requirement of such documents.

Most of the transferred documents in a vessel transaction need to be notarized or legalized in order for the contract to take effect. However, the process of notarized and legalized in some country only certify that the documents have been duly signed and stamped, it doesn’t confirm or verify the certainty of the content and information provided in the documents. Therefore, both parties should require the other to provide the certificate or proof of the competent authority agencies confirming the certainty of the information or content that they have committed in the contract. For example, in a ship transaction, the buyer usually required seller to commit that the ship is free from any encumbrances, debts, taxes, mortgages and maritime liens. To confirm the certainty of such information, the buyer may require the seller to provide documents or certification from National Registration Agency for Secured Transactions to ensure the documents are provided in good faith. To reduce the risks, the buyer may also ask for a specific clause in a contract stating the liability of the seller in the event of future dispute relating the vessel.

In case one parties of the contract is an organization or company, the required documents should include the Minute of the Joint Meeting and Decision/ Approval of Directors or Shareholders resolving the sale of the vessel in accordance with the term and conditions of the MOA. Those documents should be duly established and signed in accordance with the requirement of the national legislation (law of the country where the company is set up). The Approval of Shareholder should also require the signature of all the shareholders of the company in order to avoid future disputes that may arise. Other documents which parties should also consider including Association’s Regulation, authorized papers, passports and personal documents of the representatives of each party. This will help better understand the legal position of parties in the contract, ensure their legal status to engage and perform in the contract.

ANT Lawyers have experience in laws and shipping matters to advice clients whom are interested to buy ships from Vietnam ship owners. We assist our clients in the process of reviewing contract, examining the documents and giving useful consultation for the sale and purchase procedure.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang.

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The Benefit from Protecting Invention Patent

    Invention protection shall bring advantages for the owner of invention including the usage and application within the duration of 20 years. As Law on intellectual property of Vietnam, an invention patent shall be valid from the grant date until the end of twenty (20) years after the filing date.

Besides, Invention patent can bring its owner the followings:

The steady position on the market: with the invention patent, the owner of the invention shall have rights to prevent others from using their invention with commercial purpose. This will reduce the competitive capacity of competitors and bring preferred position for the owner.

Right to sell and license the invention: in case owners of inventions cannot use their invention by themselves, they can sell or license the use of their inventions to other people or companies. They can license only the right of use and sell all of their inventions. This does not only bring them a lot benefits but also avoid risks because of the competition on the market.

When your inventions have been commercialized and got the significant position on the market, other companies or people might tend to copy and use your invention illegally or sell other products which are similar to yours. If your inventions were not properly registered at competent authority, the competitors and violators can use your inventions without breaching of law.

Therefore, it is essential to register a new invention to protect the owner’s rights to avoid unfair competition on the market.

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Where Foreign Investors Obtain Investment License in Vietnam?

    To set up a business in Vietnam through foreign direct investment, foreign investors need to register the investment license from Vietnam Ministry of Planning and Investment (MPI).

Depending on investment business lines, investment conditions, scale of the projects, where investment project is located, other Vietnam State authorities would be involved. MPI in Vietnam takes charge of developing legislation, guiding, consulting and coordinating with other State authority in regard to all investment in Vietnam. Foreign investors apply for investment license at MPI which is acting as the contact point. People’s Committee will be the government body that administer investment activities within its city or province and issue the investment license to the foreign investor.

In case the foreign investor setting-up a business within an industrial zone, the management board of an industrial zone will have authority over the investment licensing process. For investment project which is larger than VND 300 billion (around USD 14.2 million) or in conditional investment area, MPI and other ministries will be involved in the evaluation process to recommend to the Prime Minister for approval. Other ministries involved in investment project licensing would be Ministry of Trade and Commerce and Minsitry of Finance for setting up a trading company in Vietnam; Ministry of Science and Technology for investment in high-tech projects in Vietnam; Ministry of Education and Training for setting up education institute; Ministry of Health for investment in hospital in Vietnam, etc to ensure they are complying with the specific industry’s regulations.

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Which Form of Investment - Branch or Company?

    Foreign entities can set-up company or branch offices in Vietnam to carry out business activities.

There are several main different aspects between opening a branch office or establishing a foreign owned company in Vietnam.

1. Conditions

• Permits for establishment of Vietnam-based branches of foreign enterprise shall each have a valid term of five years.

• Foreign enterprise must choose between establishing a 100% foreign capital enterprise or forming a joint-venture with domestic investor or company.

2. Certificate

• The Branch office needs to apply and obtain the operation license of a Branch;

• A foreign owned company will need to apply and obtain the investment certificate (“IC”) to operate in Vietnam.

3. Capital

• Optional, foreign entity will decide how much money to invest in branch. The allocation capital for branch is capital for the subordinate units.

• Mandatory, foreign entity will need to provide minimum capital as required by Vietnam Law in conditional investment area.

4. Obligation of owner

• For branch office in Vietnam, owner takes full responsibility;

• For company, owner takes responsibility within the capital contributed into the company in Vietnam;

5. Other matters

• For branch office setting up in Vietnam, the procedure is less complicated compared to those for the establishment of a 100% foreign owned company; the branch office is able to carry out trading and some other activities as stipulated by Vietnam laws and the WTO commitments which Vietnam enters. The business lines of a branch have to be aligned with the business lines of the headquarter of the foreign entity.

• Setting up foreign owned company would be more complicated than the setting up of the branch office, however this form of investment has more flexibility and freedom as it is a stand alone Vietnam entity recognized under Vietnam laws.

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Patent Prosecution Highway Mechanism Between Vietnam and Japan

    First pilot program between Vietnam National Office of Intellectual Property (NOIP) and Japanese Patent Office (JPO)

NOIP and JPO have jointly undertaken the first Pilot Patent Prosecution Highway program (“PPH”) since 01st Apr, 2016.

According to this bilateral PPH, the patent application filed at JPO (previously filed at NOIP) falling into one of the three following cases:

(i) An application which validly claims for priority under the Paris Convention on the basis of NOIP application(s), or

(ii) A PCT national phase application to Japan without priority claim, or

(iii) An application which validly claims for priority under the Paris Convention to the PCT application(s) without priority claim.

And meeting other conditions regulated in Procedures guidance to file a request to JPO for PPH program between JPO and NOIP (“Procedures”), the applicant shall be entitled to request JPO to fast prosecute the application on the basis of providing research and evaluation results of NOIP and other relevant documents to JPO for references.

For the patent application filed at NOIP (previously submitted to JPO) falling into one of the three following cases:

(i) An application which validly claims for priority under the Paris Convention on the basis of JPO application(s), or

(ii) A PCT national phase application to Vietnam without priority claims and this PCT submitted to JPO as an international application receiving agency (applications’ number initiating with PCT/JP hereby referred to as “PCT/JP applications”), or

(iii) An application claims for priority under the Paris Convention on the basis of PCT/JP application(s) without priority claims;

And meeting other conditions regulated in the Procedures, the applicant shall be entitled to request NOIP to fast prosecute the application on the basis of providing research and evaluation results of JPO and other relevant documents to NOIP for references. The duration of the PPH program shall be expired by the date of March 31st, 2019.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Da Nang.

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Real Estate Legal Matters in Vietnam

   In general, it is not permitted to own land in Vietnam as a private entity because the land belongs to the people and the State of Vietnam thereby operates as the administrator.

However an ownership of a right to use land is permitted according to Vietnamese Law. This so-called Land Use Right (“LUR”) Certificate provides the means to lease land from the State for Vietnamese and foreign people. This LUR Certificate entitles the land users to protect their legitimate rights and interests. The sale of a house or real estate is in fact the transfer of the rights for house ownership combined with the transfer of the land from the seller. The right to use land can be directly acquired by different ways that are: lease from the state; sub-lease from a developer of a zone; transfer from another land user; allocation from the state. The legal grounds for Land and House Law of Vietnam are stipulated in the Law on Housing 2005 of Vietnam as well as in the Law on Land 2003. The rights and entitlements of holders of house ownership and the holders of the LUR Certificate are settled in this law.

According to Article 12 of the Law on Housing 2005, the name of the individual who holds the house ownership shall be written in the house ownership right certificate and his/her rights are stipulated in Article 21 that include for example the rights to posses; use; sell; lease; donate; exchange; lend or to let other people stay temporarily in the house. As stipulated in Article 106 of the Law on Land 2003, the one who holds the LUR and house ownership certificate is entitled to exercise the full range of rights over the land/house. As such, land use rights and ownership of assets on the land are combined in the Certificate of Land Use Right and House Ownership Right (LURC).

But the possibilities to acquire land or houses depend on the individual/organization that wishes to do so, because Vietnamese, overseas Vietnamese and Foreigners do not have the same rights. Especially for foreigners, it was often quite challenging to acquire land or houses in Vietnam. Before the year of 2009, foreigners could not legally acquire property but only could make a joint venture with a Vietnamese company. But the Resolution No. 19/2008(ND-QH12, effective January 2009, started to entitle foreigners to own houses in Vietnam under the conditions that the foreigner 1) is hired by an enterprise that currently operates in Vietnam and 2) must have at least a temporary residence card to purchase and own an apartment unit in Vietnam. This five-year piloting program that would end in 2014 is now discussed by the Vietnamese Prime Minister to continue this program after the first five years to support the real estate market and to make it more attractive for foreigners.

Even though about 80,000 expats live and work in Vietnam, only more than 400 cases of foreigners buying houses in Vietnam could be registered. Of course, this might be due to the difficulties for foreigners to buy houses before this pilot program . But this Resolution No. 19, which was guided by Decree No. 51/2009/ND-CP, still does not make it easy to operate in the real estate market in Vietnam for foreigners because of the complicated procedures to register ownership. After the first 5 years, the government stated to have the plan to review the pilot policy and the Ministry of Construction also opened up for the idea to allow foreigners to buy houses no matter if they work and do business here or if they want to buy real estates in Vietnam.

As the Vietnam’s real estate situation seems to stand before a turning point, it is necessary to keep up to date with all legal changes and developments. Due to the fact that Vietnamese law has special provisions for every organization or individual who wishes to operate with land and real estates related to House Law, it is inevitable to know about this legal circumstances in Vietnam.

ANT Lawyers could assist in different land and house related projects and matters such as land ownership, house purchase or sale and is aware of the differences between provisions on house law for foreigners and Vietnamese. Our professionals could advise clients about possibilities and potential risks concerning real estate laws, housing laws in Vietnam and furthermore could support clients with required procedures with the Vietnamese authorities.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have Attorneys in Hanoi, Attorneys in Ho Chi Minh and Attorneys in Danang. 

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What Has Changed in Vietnam Investment Law 2014?

     The new Investment Law 2014 announced by Vietnam Government on December 26th, 2014 has come into effect on July 1st, 2015. The new law introduces changes which include more opening policies for foreign investors to establish and set-up businesses in Vietnam.

What makes foreign investors hesitate to invest and set-up business in Vietnam? The administrative problems and lack of transparency; the inconsistencies in implementing the principle of freedom to do business.

Theoretically, the new Investment Law 2014 will resolve the above mentioned issues by offering a faster amendment mechanism on registering changes or issuing the new Business Registration Certificate or Investment Certificate. Generally, the process and procedures are expected to become more straightforward and convenient for foreign owned companies compared with 2005 Investment Law and the 2005 Enterprise Law by reducing the volume of paper and the administrative works.

In conclusion, the 2014 Investment Law will help clear up some of the confusions that accompanied the 2005 Investment Law and the 2005 Enterprise Law and their application, as well as ease and simplify the foreign investment process which, it is hoped, will promote business activities and investment into Vietnam. The investment of foreign investor into a Vietnamese company in certain situations would be treated in the same manner as a domestic investor that provides an opportunity to offer clients creative structuring solutions to facilitate investment in Vietnam.

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers have law firm in Hanoi, law firm in Ho Chi Minh City and law firm in Da Nang.

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